reflection on trading IBD50 stocks through earning

I feel I need to write something based on recent experience.

IBD50 stocks are high growth stocks rated by investors.com. Starting from July, I bought a few call options on some of stocks and bet them for earning. In the past years, I learned not betting earning report by buying stocks. Recently I learned to hold a small number of call options betting the good outcome of earning. I used this strategy on IBD50 stocks. My outcome is terrible for this 2-month trading period. I think the cause is that.
1. unlucky to pick up wrong stocks or because these stocks are in late stage base.
2. market condition: everytime market made a new high, then it quickly reversed. Most of the breakout from new high I saw were sold off hardly.

Losing trades:
The stocks I traded are LITE, MOMO and VEEV. All earning were good and beated expectation. However the stock price dived hard.

1. LITE: I bought at $1.1. Initially it was up to $2. I had high conviction on it. The stocks broke out then sold off hardly. The earning is in-line. It went up in the morning pre-market due to conference call to the price I initially bought the option. However, there was not ask/bid price of option at the high price. I took bitter lose sold at 0.15.

2. MOMO: I bought 18Aug2017 40 call. I let the option expired as the stock was 44. MOMO dived from $47 to $36 in the morning of earning day. In the morning when I woke up around 7am, the stock price was 42~ish down from 47-ish around 4am. I made bad mistake without closing my position.

3.VEEV: yesterday night bad earning, stock closed around 61 after-market. Right now stock price is only 55-ish. I bought at $2.35. I recall initially this is a winning trade (went up to $3). Now it is worthless.

Winning Trades:
only TTWO.


Conclusion:
lesson learned:
1. need to identify early base of IBD50 stocks.
2. do not blindedly bet the earning of IBD50 stocks

Lesson from two option trades (COST and BWLD)

Two trades:
1. COST_21Jul17_170C, bought on 6/22/2017 at 0.55.
2. BWLD_18Aug17_155C, bought on 6/27/2017 at 1.05.

Both trades wiped out completely. At time of this writing, BWLD announced bad earning. The price at post marker now is around 110.

https://www.earningswhispers.com/epsdetails/bwld

Rational: downtrend, waiting for short term rebounce. No rebounce or the rebounce is minimal.

Lesson: do not trade when the 1st leg down. It is hard to know where the bottom is. Waiting for the

2nd leg or 3nd leg, and there is bottom forming, for example, higher low, divergence etc.

Industry Sub-Group Rankings

I need to understand which stocks fall into each group. Then close monitor the top list on a weekly basis.

http://www.investors.com/data-tables/industry-sub-group-rankings-jul-20-2017/

FDA PDUFA dates and FDA Panel Review dates

http://www.rttnews.com/corpinfo/fdacalendar.aspx

some thoughts on CDE charts

for stocks in down trend, if certain level was tested multiple times, it is a resistant level which is hard to overcome it. The tendency for breakout is more likely to fail . I made such mistake multiple times, such as NE, QIHU trades. I did not take loss at the first place, then within next few days, there was a nasty long red bar.

When such stock is a narrow range, it is a good trade to try breakout from down trend. I did good trades such as SRPT. The trade trended to stall for next bar, where some people took profit. Then the uptrend may continue higher.

Growth Stock screener with criteria

http://finviz.com/screener.ashx?v=211&ft=3&t=AMAT,ACLS,BMRN,BCC,CLMT,CSII,CC,KOF,COHR,CBMX,DWCH,EC,EVRI,FANH,GNK,GDEN,GOGL,HPP,INVA,KBH,KLXI,KLIC,LRCX,LGF/A,LPX,MSG,MLCO,MELI,MKSI,MOH,MOMO,NFLX,NUE,PCTY,PBA,PMT,PKX,PRIM,QUOT,RAVN,RDS/A,SCLN,SALT,NOW,SINA,SCCO,SQ,SBLK,SUI,TAL,CG,OLED,VDTH,WB,WDC,XCRA,XBKS,XL&ta=0&o=-change&r=49

EP, STIB and RSI power list for week 2016-06-19 to 2017-06-23

Weekly RSI >=65 and volume surge at least 50%

http://finviz.com/screener.ashx?v=211&ft=3&ta=0&o=-change&t=AAGIY,ACLS,ADBE,ADMP,ALRM,ANSS,ANTM,ARIS,ASIX,ATRS,ATSG,BABA,BDSI,BID,BL,BLUE,BOCH,BPI,BPMC,BRKR,CA,CACQ,CAE,CAI,CALA,CAMT,CARA,CARB,CCN,CE,CELG,CETV,CFCO,CHGG,CHUBK,CI,CLVS,CO,COHR,COOL,COR,CORI,CPRX,CTLT,CTRL,CUTR,CVRS,CZR,DAIO,DANOY,DFT,DRRX,DVAX,EADSY,EARN,EHTH,ENOC,ENTA,ENZ,EVBG,EVH,EVRI,EXEL,FDX,FIVN,FNFV,FNJN,FOLD,FOR,FOXF,FRBK,FTV,GDDY,GDOT,GLPI,GMRE,GWRE,HIIQ,HOLX,HOME,HTHT,ICHR,IMGN,INFO,INST,INSW,IRTC,ITI,IXYS,JD,JKS,KFY,KIN,KNSL,KTWO,LGND,LH,LHCG,LIVN,LOXO,LPSN,LVMUY,LYV,LZB,MCFT,MDSO,MGDDY,MMSI,MOBL,MRAM,MRCY,MRT,MYGN,NK,NORD,NOVT,NVCR,NVDQ,NXPI,NYT,OLED,OMER,ORCL,OTIC,PAHC,PEGI,PETS,PGR,PI,PIRS,PKI,PLNT,PLSE,PRAH,PRXL,PTLA,QGEN,QSII,QSR,RATE,RDNT,REGN,RGEN,RHT,ROX,RP,RTIX,RUN,RVNC,RXDX,SAGE,SFTBY,SGMO,SITE,SLD,SNC,SNX,STAY,STE,STRL,TCEHY,TCMD,TCX,TDOC,TEAM,TGS,TITN,TLGT,TMHC,TPRE,TRNO,TRU,TRUP,TRVG,TTD,TTEC,TTWO,UMH,UPLD,VAC,VHC,VOXX,VRNS,VSLR,VSM,WB,WFM,WIFI,WK,WPRT,XHR,XPO,XTLY,YUME,ZGNX,ZN



Weekly RSI within [50,65) and weekly volume surge at least 50%, and weekly price increase at least 5%

http://finviz.com/screener.ashx?v=211&ft=3&ta=0&o=-change&t=ADMP,AHH,AVHI,BKD,BMCH,BOLD,CSU,DFIN,EGHT,FNSR,HDP,IMDZ,KNOP,MEIP,MORN,MSEX,MTNB,MZOR,NDRM,NK,NTRI,OMNT,OTIC,PCO,PLNT,PSTG,RETA,RILY,RXDX,SEKEY,SELB,SPNC,SYRS,TOSYY,TRCO,WKHS


EP list

http://finviz.com/screener.ashx?v=211&ft=3&ta=0&o=-change&t=ABEO,AGN,AMD,AMGN,AMID,AMZN,ARIS,ARNA,ARRY,AUPH,AVGO,AVXS,AXSM,BIIB,BLCM,BMRN,BPMC,CA,CAI,CARA,CARB,CE,CELG,CLVS,CMG,COOL,ENOC,EQGP,ESPR,EXEL,FNSR,FRTA,GBT,GNRT,GOOG,HBAYF,HBM,HIIQ,HMCBF,ILMN,IMDZ,IMGN,INCY,IPXL,IVTY,KIN,LBIO,LZB,MRAM,NANO,NEOS,NK,NLNK,NTES,NTLA,NVCR,NVDQ,ORCL,OTIC,PBYI,PI,REGN,RHT,RICE,RUN,RXDX,SGMO,SIEN,SN,SNCR,SPWR,TK,TSLA,TXMD,VNDA,VRTX,VRX,VSLR,WFM,WGO,XBIT


STIB list
http://finviz.com/screener.ashx?v=211&ft=3&ta=0&o=-change&t=ACHC,ADMP,AERI,AKBA,ALJ,ARA,ARIS,ARNA,AXON,AXSM,BDSI,BL,BZUN,CAI,CALA,CARB,CBAY,CLVS,CO,COOL,DAIO,DDD,DVAX,ECPG,EVH,EXAS,EXTR,FIVN,FNJN,FOLD,FSLR,GLYC,GOOS,GRUB,HIIQ,HTHT,ICHR,IMDZ,IMGN,IMMU,INFN,IRWD,JD,JKS,LL,LLEX,LOXO,MDSO,MDXG,MRAM,MYGN,NEOS,NK,NOVT,NTES,NVCR,NVMI,NVS,OCUL,OMER,OTIC,PBYI,PETX,PHG,PI,PKI,PLSE,RDUS,REGN,RILY,RTEC,RUN,RVNC,RXDX,SEDG,SIEN,SORL,SPKE,SPWR,TDOC,THC,TLGT,TROV,VAC,VEEV,VHC,VOXX,VRTX,VRX,VSLR,WB,WETF,WFM,WGO,WKHS,WPRT,WTW,XLRN,XON,YUME,ZN